Chinese state media on Thursday warned against risks in chasing local ChatGPT-concept stocks, while domestic artificial intelligence (AI) firms advised investors to be rational after their rising share prices captured regulators’ attention.
ChatGPT, a chatbot built by U.S. firm OpenAI and backed by Microsoft Corp (MSFT.O), provides strikingly human-like responses to user questions. Frenzy around the technology unveiled at November-end has seen shares of Beijing Haitian Ruisheng Science Technology Ltd (688787.SS) rise 217% in 2023.
Hanwang Technology Co Ltd (002362.SZ) has soared as much as 129% as of Wednesday, CloudWalk Technology Co Ltd (688327.SS) 128%, and TRS Information Technology Co Ltd (300229.SZ) 66%.
The stocks fell on Thursday following the state media warning as well as a plunge in Alphabet Inc (GOOGL.O) shares that erased $100 billion in market value after the Google parent’s ChatGPT rival shared false information.
In a front-page editorial, the Securities Times spotlighted several technological concepts that previously prompted stock buying in China – such as fifth-generation telecommunications networks (5G), virtual reality (VR) augmented reality (AR), and anti-virus garments – the excitement for which has diminished.
Though some hotly chased concepts have been profitable, “many more new ideas haven’t been commercialized, or require more time to prove,” the state-backed newspaper said.
“However, some people avidly speculate on fake concepts, luring others into schemes of pumps and dumps. Investors eventually end up in tears so they should not follow.”
Firms developing ChatGPT-like concepts have also pointed out risks at the request of regulators after their prices soared amid intense interest in generative AI – technology that can generate new media and data such as images and text.
Beijing Haitian Ruisheng Science Technology said its ChatGPT-style products and services do not yet earn revenue, and that it has no connection to OpenAI. Though such technology “is on a long-term uptrend, we need to analyze its speed of growth, and effect, in a cool-headed way,” it said in a filing in response to questions from the Shanghai Stock Exchange.
The company said it expects a close to 50% fall in 2022 net profit, and urged investors to be cautious as its valuation is currently much larger than the industry average.
Buy Crypto Now360 Security Technology Co Inc (601360.SS), in response to regulators’ questions, said its self-developed ChatGPT-related technology is still at a nascent stage and is used only internally as a productivity tool.
It is uncertain about when it can promote ChatGPT-style products, and how successful they will be, so “we advise investors to pay attention to market trading risks, decide rationally, and invest cautiously.”
Among deep-pocketed Chinese companies joining the latest chatbot race, e-commerce giant Alibaba Group Holding Ltd (9988.HK), on Wednesday said it is designing a ChatGPT-style tool, while rival JD.com Inc (9618.HK) said it plans to imbue ChatGPT-like technology into some products.
Gaming major NetEase Inc (9999.HK), aims to deploy similar “large language model” technology in its education business, a person with knowledge of the matter told Reuters.